Boeing Awarded $366M for Small Diameter Bomb I Lot 19, Raising Concerns Over Competition
Contract Overview
Contract Amount: $366,322,160 ($366.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-05-31
End Date: 2026-11-05
Contract Duration: 1,254 days
Daily Burn Rate: $292.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: SMALL DIAMETER BOMB I LOT 19 ALL UP ROUND
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $366.3 million to THE BOEING COMPANY for work described as: SMALL DIAMETER BOMB I LOT 19 ALL UP ROUND Key points: 1. Significant contract value of $366 million awarded to a single large defense contractor. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract is for ammunition manufacturing, a critical defense sector. 4. Potential for taxpayer funds to be used inefficiently due to sole-source award.
Value Assessment
Rating: questionable
The contract's fixed-price incentive structure aims to control costs, but without competition, it's difficult to benchmark against similar contracts. The awarded amount of $366 million for 1254 days of performance warrants scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for these munitions, as the government did not explore potentially lower-cost alternatives.
Public Impact
Taxpayers may be overpaying for essential defense munitions due to the absence of competitive bidding. The Department of Defense relies on contractors like Boeing for critical weapon systems, making oversight crucial. This award highlights a potential gap in ensuring maximum value for defense spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition
- Potential for inflated pricing
- Lack of transparency in price justification
Positive Signals
- Addresses critical defense need for munitions
- Fixed-price incentive contract aims for cost control
Sector Analysis
This contract falls within the defense sector, specifically ammunition manufacturing. Spending benchmarks in this area are often influenced by geopolitical factors and the need for advanced weaponry, but competitive pricing remains a key concern.
Small Business Impact
The contract data indicates that small businesses were not involved in this specific award, as it was awarded directly to The Boeing Company. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses.
Oversight & Accountability
The Department of Defense, through its agencies like the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature of the award necessitates robust oversight to ensure fair pricing and effective delivery.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- Long contract duration
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $366.3 million to THE BOEING COMPANY. SMALL DIAMETER BOMB I LOT 19 ALL UP ROUND
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $366.3 million.
What is the period of performance?
Start: 2023-05-31. End: 2026-11-05.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. The government should have conducted a thorough price analysis, potentially using historical data or independent cost estimates, to ensure the negotiated price was fair and reasonable despite the absence of competition. This process is critical for taxpayer protection.
How does the per-unit cost of these Small Diameter Bombs compare to similar munitions procured through competitive processes?
Without access to detailed cost breakdowns and comparative data from competitive procurements, it is difficult to definitively assess the per-unit cost. However, the lack of competition inherently suggests a higher risk of the per-unit cost being above market rates. Further investigation into historical pricing and industry benchmarks is recommended.
What measures are in place to ensure the effectiveness and timely delivery of these munitions, given the significant contract value and duration?
The contract includes a fixed-price incentive structure, which incentivizes both the contractor and the government to meet cost targets. The Defense Contract Management Agency (DCMA) will likely provide oversight for quality assurance and delivery schedules. However, the long duration and sole-source nature necessitate vigilant monitoring to ensure performance standards are met.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S MCDONNELL BLVD, SAINT LOUIS, MO, 63134
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $366,735,795
Exercised Options: $366,735,795
Current Obligation: $366,322,160
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA867220D0001
IDV Type: IDC
Timeline
Start Date: 2023-05-31
Current End Date: 2026-11-05
Potential End Date: 2026-02-28 00:00:00
Last Modified: 2026-01-15
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